Flipkart, Amazon now turn focus on large appliances
06 April 2017
The country's two largest online marketplaces Flipkart and Amazon are trying to lure more consumers to make white goods purchases such as air conditioners and televisions by providing exchange offers, quick delivery, and installation.
They are also mulling after-sale service and buy-back offers, The Economic Times reports.
Both Flipkart and Amazon India have announced significant investments in building supply chain, delivery and installation capabilities for selling large appliances online. While Flipkart has announced a network of 10 delivery centres spread over 6 lakh square feet, Amazon India has invested in setting up nine fulfilment centres across nine states to ship large appliances and furniture.
Currently, smartphones, small electronics and fashion account for a large chunk of the sales of online marketplaces. Now, Flipkart and Amazon are eyeing a big chunk of India's fast-growing consumer durables and large appliances market.
The country's electronics market is expected to grow to $400 billion in 2020 from $94.2 billion in 2015, according to data from India Brand Equity Foundation. Given the lack of choice and service in interior parts of the country, the segment is a natural fit for online marketplaces to expand. As on January 2016, the rural market contributed to one-third of total consumer electronics and appliances sales.
''As of now, we offer next day delivery service across 10 cities and offer scheduled `D+I' (delivery plus installation) services through our partner organisation Jeeves, which covers 9,000 pin codes,'' Rohit Sharma, head of supply chain at Flipkart, told ET.
The top marketplace also plans to launch its private label brands in the large appliances category to cater for specific price points and specifications, though it has not yet laid out a concrete plan.
After-sales service will be a key factor for marketplaces to make a mark in the large appliances market, apart from buyback offers, experts said.
''If we can provide a great experience with the purchase and service for large appliances, we create a customer for life,'' says Manish Tiwary , vice-president, category management, at Amazon India. He said the category typically accounts for 10-11 per cent of the sales for a marketplace and for Amazon India, it ranks among the top five categories.
Amazon India has partnered with multiple third-party service partners, including HouseJoy, across 20 cities to offer installation services.
''The facilities set up by us will also open up 1,200 job opportunities in captive and contract roles across the various stages of supply chain and delivery. We are currently focused on fulfilling the orders through Amazon with the FBA model,'' said Akhil Saxena, vice-president, India customer fulfilment, Amazon India.
The marketplaces have also extended their exchange programmes.
Piloted in January 2016, Flipkart is powering the exchange for old appliances through its evaluation team and has tied up with local liquidation channels as part of the Prexo programme. Similarly, Amazon is also counting on the `value conscious customer' to look for better deals online.